Austria can be sued in the US in claim that it forced Jew to give Klimts after World War II

01/09/2001

Austria is not an adequate forum to resolve Nazi loot claim, says California federal court
los angeles. A federal court has ruled that Austria can be sued in California for return of six Gustav Klimt paintings stolen by Nazis from a Jew, Ferdinand Bloch-Bauer, and now in the collection of the Austrian National Gallery (ANG). The paintings in question are "Adele Bloch-Bauer I", "Adele Bloch-Bauer II", "Beechwood", "Apple Tree I", "Houses in Unterach am Attersee", and "Amalie Zuckerkandl". They are valued at roughly $150 million.

In what appears to be the first ruling of this nature, the court said that the plaintiffs had established a "substantial and non-frivolous claim" that the Klimts had been taken in violation of international law, not just by Nazi "aryanisation" but a second time when Austria itself required that the paintings be "donated" to national collections in exchange for export permits after the war. Because the lawsuit concerns property taken in violation of international law, Austria has no immunity as a sovereign foreign state, the federal court for the Central District of California ruled in its 4 May decision. The paintings did not have to be in the US for the suit to proceed, the court said.

The ruling's factual findings relate only to the question of jurisdiction, not ultimate ownership. Austria is appealing the decision.

The claim was brought by Maria V. Altmann, 85 and a US citizen, the niece and an heir of Ferdinand Bloch-Bauer, who died almost penniless in 1945, his vast collection of porcelain and paintings stolen by Nazis and dispersed to Hitler, Goering and others. Two of the Klimts are portraits of Ferdinand's wife Adele, who died in 1925 and asked in her will that Ferdinand consider donating four of the disputed paintings to the ANG on his death. But the paintings belonged to Ferdinand anyway, and Ferdinand made no bequest to the ANG in his will, the plaintiff says.

According to Ms Altmann, in the late 1940s an attorney retained by Ferdinand's heirs acting without authorisation traded some of the paintings to the ANG in exchange for a license to export Ferdinand's remaining artworks. After the war, Ms Altmann argued, it was Austria's policy to use a law that barred the export of items of Austrian cultural heritage to force Jews who sought to export their artworks to trade some art items for export permits on others.

The suit seeks a court declaration that the disputed Klimts be returned to Ms Altmann under a 1998 Austrian law which returns artworks that were donated under duress to state museums in exchange for export permits after World War II. She also seeks return of the paintings under California law, and other remedies. The disputed paintings are owned by Austria but exhibited by the ANG.

No immunity for expropriations

The Foreign Sovereign Immunities Act is the sole way for US courts to gain jurisdiction over a foreign State or its agencies. Under it, a foreign State is presumed immune from suit unless one of the law's exceptions applies, and the court holds that the "expropriation" exception applied here. To meet that exception, Ms Altmann had to establish a "substantial and non-frivolous" claim that the Klimts were taken in violation of international law, that the works are "owned or operated" by an agency of a foreign State, and that the agency engages in commercial activity in the US. She succeeded.

Ms Altmann established a claim that a taking in violation of international law occurred both at the time of "aryanisation" and when the paintings were "donated" to the ANG in 1948 to get export licenses for other artworks, the court said. That taking was not for a valid public purpose; "Austria's own laws required their return to their rightful owners," the court said. Austria's "acknowledged practice" of requiring export licenses for artworks stolen by Nazis "singled out aliens for regulation by the State" because aliens would be more likely to seek export of these artworks than Austrian citizens, the court added. Because Austrian law required return of Nazi loot to its owners, the exchange of certain artworks for export permits on other artworks "cannot be viewed as just compensation", it said.

Commercial activity in US

For suit to proceed, the court also had to find that the ANG is "engaged in commercial activity" in the US. This requirement was met by the facts that the ANG has published a guidebook in English for purchase in the US, advertises its collection in the US, and receives US visitors, all of which activities were available to US citizens within the court's jurisdiction. The Gallery had also lent "Adele Bloch-Bauer I," one of the disputed paintings, to the US in the past.

Austria not an

adequate forum

In addition to claiming immunity, Austria sought to dismiss the lawsuit citing the inconvenience of California as a location for the lawsuit. But a party seeking to use this doctrine must demonstrate the existence of an "adequate alternative forum," the Los Angeles court said, and Austria does not provide an "adequate alternative forum." Ms Altmann would most likely be barred from suit in Austria by the statute of limitations and would be "left without a remedy," the court said, noting that the Republic and ANG have "refused to waive" this defense. (In contrast, under US museum group guidelines, museums may "waive certain available defenses," presumably including statutes of limitation, in Nazi-looting claims. (The Art Newspaper, No.101, March 2000, p.7). The court found further the court fees that Austria would charge Altmann, $130,000 to $200,000, were "oppressively burdensome." Austria is arguing that Ms Altmann should pay even greater fees, the California court noted.

Legal analysis: Klimts on a short leash?

The Bloch-Bauer case is the second lawsuit in four years where works by Austrian artists, claimed as stolen from Jews by Nazis after the Austrian annexation and now showpieces in Austrian collections, are being claimed in US courts. In a federal lawsuit now pending in New York, the United States is seeking to confiscate a painting by Egon Schiele said to have been taken from a Jew and now in the collection of the Leopold Museum in Vienna (The Art Newspaper, No.97, November 1999, pp. 23-4). That painting is in New York, which is why courts in New York may try the case. In contrast, the disputed Klimts are in Austria. If the plaintiff wins the California lawsuit, it is not clear how that court can enforce any order it might make directing Austria to deliver the paintings. It is unlikely that the ANG will lend its Klimts to the US, for fear that they might be seized to satisfy a possible judgment in the case.

Martha Lufkin

Austrian National Gallery

unrepentant in 1948

As in the lawsuit over an Egon Schiele painting in New York, the plaintiff in the Bloch-Bauer case is arguing that Austrian authorities knew or should have known that the disputed artworks were Nazi loot yet took actions to keep the objects in national collections.

According to Ms Altmann, in February 1938, the ANG asserted that five of the six paintings were bequeathed to it under Adele Bloch-Bauer's will, and that Ferdinand merely had permission to keep them during his lifetime. But, says Ms Altmann, Dr Garzarolli of the ANG learned in March 1948 that Adele had not bequeathed the paintings to the ANG.

Dr Garzarolli then expressed his concern, in a 8 March 1948 letter, that his predecessor at the ANG had not obtained a formal declaration of gift from Ferdinand: "I cannot understand why even during the Nazi era an incontestable declaration of gift in favour of the State was never obtained from Ferdinand Bloch-Bauer. In any case, the situation is growing into a sea-snake."

Dr Garzarolli sought help from the Austrian Attorney General in seeking to retain three of the Klimts, and delays and donations through Dr Otto Demus, president of the Federal Monument Agency, says Ms Altmann.